BASF SE won’t aggressively pursue a bid for Akzo Nobel NV’s chemical division, and will instead prioritize deals in agrochemicals, according to people with knowledge of the situation.

The German company is primarily interested in the crop-care assets that Bayer AG is divesting as part of its deal for Monsanto Co., said the people, who asked not to be identified because the plans are private.

Having remained on the sidelines of the large-scale mergers and acquisitions that have swept across the agrochemical industry, BASF Chief Executive Officer Kurt Bock is in pole position to pounce on the billions of dollars of crop-care assets that Bayer and others are being forced sell to meet antitrust regulator demands. Whereas normally it takes just a buyer and seller to agree on a deal, the presence of antitrust regulators in discussions adds another layer of complexity, Bock said on a call Thursday.

Internally, BASF managers lobbied senior executives to pursue Akzo Nobel’s chemicals division, which could carry a price tag of 10 billion euros ($10.9 billion) or more, one of the people said. Rather than submit to internal pressure to do large deals, Bock is sticking to his conservative approach to M&A, believing the valuations being placed on assets make it too difficult to create returns. Instead, he’s pumped investment into internal growth projects.

White Knight

BASF is seen as one of a few companies able to accommodate Akzo Nobel’s chemicals operation, which ranges from chelates used in cosmetics to chlorine. Akzo has said it’s considering selling the business as part of a defense against a takeover bid from PPG Industries Inc.

Akzo Nobel operates a chlorine plant in Frankfurt, close to where BASF is based in Ludwigshafen. Only small parts of Akzo’s portfolio would struggle to find a fit with BASF’s operations, one of the people said.

For now, BASF is happy to monitor developments at Amsterdam-based Akzo Nobel, and may explore ways to buy parts of the division if it’s broken up, the person said. Some private equity firms are exploring a bid for the entire chemicals business, while others are partnering up to make a joint offer, said the person.

LyondellBasell Industries NV is another potential bidder for Akzo’s chemicals business, the people said. The Houston-based company’s Chief Executive Officer Bob Patel said April 5 that the company is studying potential acquisition opportunities, and could borrow as much as $18 billion to finance deals without harming its investment-grade credit rating.

Representatives for BASF and Akzo Nobel declined to comment. LyondellBasell also said it doesn’t comment on speculation as a matter of policy.